Commodity Money
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Definition of Commodity Money:
Commodity money is a commodity that has intrinsic value and is used as a median of exchange.
Detailed Explanation:
Economies that rely on bartering evolve to identify a medium of exchange, which is usually a commodity with sufficient demand that traders know that even if they do not have a use for the commodity, they can easily exchange it for something useful. A commodity becomes money when a community accepts it as a medium of exchange. In addition to being useful as a medium of exchange, commodity money has intrinsic value. For example, gold has been used as commodity money. Jewelers use gold in jewelry, but even people who are not jewelers own gold because they know they can sell it.
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